Cablegate: Japanese Morning Press Highlights 09/08/06

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DASD/ISA/EAPR/JAPAN; DEPT PASS ELECTRONICALLY TO USDA
FAS/ITP FOR SCHROETER; PACOM HONOLULU FOR PUBLIC DIPLOMACY ADVISOR;
CINCPAC FLT/PA/ COMNAVFORJAPAN/PA.

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TAGS: OIIP KMDR KPAO PGOV PINR ECON ELAB JA

SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 09/08/06

Index:

1) Top headlines
2) Editorials
3) Prime Minister's daily schedule

Koizumi countdown:
4) Ambassador Schieffer delivers President Bush's message of thanks
to Prime Minister Koizumi
5) Koizumi attendance at ASEM conference in Finland is his last
diplomatic event
6) Koizumi tells press he intends to avoid public spotlight after
leaving office

Political agenda:
7) Diet to convene for extra session on Sept. 26, electing a new
prime minister
8) Public's favorite for next prime minister is Shinzo Abe with 55%
support in Mainichi poll
9) Abe certain to be elected next LDP president with over 70% of the
party vote locked up
10) Newly released political contribution figures show Abe to be the
top fundraiser among LDP presidential candidates
11) Political funding report for 2005 shows big dip in corporate,
organizational contributions

Foreign relations:
12) Abe seeking bilateral summit meeting with Chinese Premier Hu at
APEC forum in November
13) JCP Chairman Shii says his premier visit to South Korea "opened
up a major channel" for dialogue
14) Japan proposes joint survey with South Korea to measure marine
radiation

Energy policy:
15) Russia's halting of Sakhalin resource development project due to
environmental suit perplexed energy-hungry Japan
16) Japan to join China, US, ROK next month in signing energy
security pact

17) US Naval Forces commander cites need for Japan to use collective
self-defense, hopes to see deep debate on Constitution

18) September economic report skips part about deflation being ended
in Japan, reflecting concern about US economy

Articles:

1) TOP HEADLINES

Asahi:
Survey of political funds: Abe's fund-raising doubles over five
years

Mainichi:
Suspected killer hangs self after killing classmate

Yomiuri:
Abe intends to hold a summit with China on sidelines of APEC in
November

Nihon Keizai:

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METI to take action to expand stockpiles of rare metals for stable
supply

Sankei:
Japan Institute of Invention and Innovation to establish three
licenses aimed at fostering experts for protecting intellectual
property rights of small and midsize companies

Tokyo Shimbun:
Political fund report for 2005: Total income at 13.28 billion yen,
down 3.8% from the previous year; Snap dissolution of Lower House
blamed for low contributions from firms, organizations

Akahata:
Political fund report for 2005: Political party subsidies used as
major financial sources for all political parties but JCP for
general election, with Minshuto (DPJ) dependent on them 100% and LDP
80%

2) EDITORIALS

Asahi:
(1) Abe's remarks: We don't want Abe to throw away the Murayama
statement
(2) ASEM: It's time to learn from Europe's experience

Mainichi:
(1) Political funds: Possible to stay away from corporate
contributions
(2) Money lending regulations: Why is much consideration given to
this industry?

Yomiuri:
(1) Sakhalin 2 project: Russia's high-handed state control of
resources
(2) First trial of architect Aneha: Construction administration and
construction industry are both in effect on trial

Nihon Keizai:
(1) Russia's credibility now questioned over Sakhalin 2 project
(2) Japan should demonstrate its presence at ASEM

Sankei:
(1) Murayama statement: Rectification after full discussion
(2) Intelligence-gathering satellites: National security should be
ensured with own technology

Tokyo Shimbun:
(1) Political funds: Far from transparent
(2) Minamata disease: All patients should be provided relief

Akahata:
Political funds may reflect the way political parties are carrying
out politics

3) Prime Minister's Official Residence (Kantei)

Prime Minister's schedule, September 7

NIHON KEIZAI (Page 2) (Full)
September 8, 2006

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10:31
Met US Ambassador to Japan Schieffer at Kantei.

11:03
Met MAFF Minister Nakagawa, followed by former MAFF Deputy Vice
Minister Kinoshita.

16:47
Departed from Haneda Airport to attend ASEM.

4) US Ambassador Schieffer conveys President Bush's appreciation for
Prime Minister Koizumi

MAINICHI (Page 5) (Full)
September 8, 2006

Prime Minister Junichiro Koizumi met yesterday with US Ambassador to
Japan Thomas Schieffer at the Prime Minister's Official Residence.
The ambassador conveyed a message from President George W. Bush to
the prime minister. The president in the message said, "I thank you
for building an extremely good relationship." After the meeting,
Schieffer told reporters: "Even after the new cabinet is formed,
there will be no change in US-Japan relations. The president will be
eager to meet with the new Japanese prime minister."

5) Koizumi leaves for Finland, his last overseas trip as premier

MAINICHI (Page 5) (Full)
September 8, 2006

Prime Minister Junichiro Koizumi departed yesterday afternoon for
Finland to attend the summit of the Asia-Europe Meeting (ASEM) to be
held in Helsinki. Koizumi will be the first Japanese prime minister
to visit Finland in 19 years since Prime Minister Yasuhiro Nakasone
traveled there in 1987. This will be Koizumi's last overseas trip as
premier.

The ASEM will hold its summit on Sept. 10 -11 to discuss Iran's
nuclear program and reconciliation in Lebanon.

Koizumi is expected to meet with Finish Prime Minister Matti Taneli
Vanhanen on the afternoon of Sept. 8. He will return home on the
12th.

Chinese Prime Minister Wen Jiabao and South Korean President Roh Moo
Hyun will take part in the summit, but Koizumi will not likely meet
with them. Prior to his departure, Koizumi told reporters: "I don't
feel like meeting (Wen and Roh) since they attached a condition (not
to visit Yasukuni Shrine)."

6) Prime Minister Koizumi intends to avoid media after stepping
down

ASAHI (Page 4) (Full)
September 8, 2006

It has been learned that Prime Minister Junichiro Koizumi told
persons close to him that he would not avoid the media after he
steps down from office. He will soon move out of the prime
minister's official residence. Yesterday he bid goodbye to US
Ambassador to Japan Thomas Schieffer, telling him, "I enjoyed
working with you." Schieffer called at the Prime Minister's Official

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Residence to convey President George W. Bush's message of
appreciation to Koizumi.

Although many news companies have asked Koizumi to respond to
interviews, he reportedly refused to accept their requests, citing,
"I want to live quietly as just another lawmaker." When he visited
Central Asia in late August, he told reporters, "I intend to stay in
the background after I end my presidency of the Liberal Democratic
Party." He will set up an office besides the one for him in the Diet
Members' Building.

7) Extra Diet to open on Sept. 26; Battle over education law and
other bills expected

SANKEI (Page 5) (Excerpts)
September 8, 2006

Liberal Democratic Party Diet Affairs Committee Chairman Hiroyuki
Hosoda and his Minshuto (Democratic Party of Japan) counterpart Kozo
Watanabe reached an agreement yesterday to convene an extraordinary
Diet session on Sept. 26 to designate the new prime minister
following the Sept. 20 LDP presidential election. Other parties also
approved the plan. The ruling coalition intends to get important
bills, including one to revise the Basic Education Law, approved in
the extra session before it ends in early December. Minshuto is
expected to take a clear adversarial stand against the ruling
coalition with an eye on the Lower House by-election in October. The
next administration is expected to face difficulties in managing
Diet affairs immediately after its inauguration.

The government and the ruling coalition plan to launch a new cabinet
on Sept. 27, the day after the prime ministerial election on Sept.
26, and have the new prime minister give his Diet policy speech on
Sept. 29.

They also intend to facilitate deliberations on a bill to extend the
Antiterrorism Special Measures Law, scheduled to expire in November,
and a bill to revise the salary law to implement the National
Personnel Authority's recommendations in August. Further, they plan
to speedily enact national referendum legislation stipulating a set
of procedures for amending the Constitution and a bill to revise the
Basic Education Law.

Establishing a new Constitution and revising the Basic Education Law
are main campaign pledges of Chief Cabinet Secretary Shinzo Abe, who
is expected to become the next prime minister. Abe said in the Sept.
3 LDP Tohoku bloc convention: "We must conduct intensive
deliberations in the upcoming extraordinary Diet session, which
would not be long. Above all, it is important to revise the Basic
Education Law." Abe also plans to give high priority to bills to
upgrade the Defense Agency to ministry status and conspiracy
legislation.

The New Komeito, the LDP's coalition partner, is also eager to enact
controversial defense ministry-related bills in the extra session
before next year's regular session for the sake of the unified local
elections and the Upper House election next year.

Meanwhile, Minshuto intends to lock horns severely with the ruling
coalition by keeping the Lower House Kanagawa Constituency No. 16
and Osaka Constituency No. 9 by-elections in October in mind.

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8) Poll: 55% support Abe in LDP presidential race that will
officially begins today

MAINICHI (Page 1) (Full)
September 8, 2006

The Liberal Democratic Party will publicly announce today its
presidential election slated for Sept. 20, in which Chief Cabinet
Secretary Shinzo Abe, 51, Foreign Minister Taro Aso, 65, and Finance

SIPDIS
Minister Sadakazu Tanigaki, 61, have already announced their
candidacies. The Mainichi Shimbun conducted a nationwide
interview-based opinion survey on Sept. 1-3 asking who was most fit
to become the next prime minister. As a result, 55% of all
respondents, or 74% of LDP supporters, picked Abe, far outdistancing
the other candidates. Abe's lead seems unshakable, being supported
by nearly 80% of LDP lawmakers, as well. The focus will be whether
he can come up with new policy stances in upcoming presidential
debates on Asia policy, social security, taxes, and other issues
that sum up five years of the Koizumi reform line.

The LDP will elect a new president, which automatically brings with
it the post of prime minister, for the first time in five years and
five months since April 2001.

The party will officially accept applications for 30 minutes
starting 11:00 a.m. today and those who have thrown their hats in
the ring will conduct a joint press conference at 2:00 p.m. today.
The new president will be determined by a total of 703 LDP votes:
403 lawmaker votes and 300 local party votes.

Abe is expected to garner a majority of votes that would not entail
a runoff.

In the Mainichi poll, Abe was picked as the most suitable person to
become the new prime minister with 55%, and Aso and Tanigaki with 6%
each. The differences with the two widened among LDP supporters with
Abe marking 74%, Aso 5%, and Tanigaki 3%.

9) Abe certain to assume LDP presidency, with 70% of lawmakers'
votes

ASAHI (Page 1) (Excerpts)
September 8, 2006

In the Liberal Democratic Party presidential election, which will be
officially announced today, the Asahi Shimbun has found through
interviews that 270 votes, nearly 70% of all the 403 lawmakers'
votes, are likely to go to Chief Cabinet Secretary Abe. In
interviews with senior members of LDP prefectural chapters about the
trend of votes, more than 70% said: "Abe has the lead." It is now
certain that Abe will be elected new LDP president in the election
on Sept. 20.

10) Poll on political funds in 2005: Abe's fund-raising ability
doubles over five years to 300 million yen

ASAHI (Top Play) (Excerpts)
September 8, 2006

A political group headed by Chief Cabinet Secretary Abe raised
approximately 295 million yen last year, nearly twice what it did
five years ago, according to a political fund report released by the

TOKYO 00005113 006 OF 010

Internal Affairs and Communications Ministry and another report by
the election office in his electoral district, Yamaguchi Prefecture.
Through interviews with firms and individuals offering
contributions, it has been found that about 30% of them have offered
political donations to the Abe group since his father was a
candidate for the Liberal Democratic Party presidency. It has also
been learned that donations from individuals jumped more than four
times over the previous year.

Looking at the details of the income in 2005, revenues from
political fund-raising parties and other events totaled
approximately 137 million yen, the largest amount on the list. In
the first fund-raising party after Abe assumed his current post,
about 52 million yen was collected.

Corporate or group donations totaled 56.6 million yen, nearly 20% of
the total, while individual donations totaled 29.2 million yen,
about 10% of the total.

Asked about reasons for offering donations (multiple replies
acceptable), 54% said: "Since I used to support Mr. Shintaro Abe
(his father), now I back Mr. Abe," followed by 26% with the reply:
"for social reasons;" 18% saying, "I was attracted by his
personality; and 9% answering, "I was attracted by his policies and
philosophy." Three cited "Abe's response measures to the abduction
issue."

Immediately after his father, then Foreign Minister Shintaro Abe,
suddenly passed away in 1991, Abe assumed the chairmanship of his
core political group. The group raised funds amounting to about 240
million yen in 1992. Most of the funds came from companies
supporting his father. In 1993, when Abe ran in the general election
for the first time and won a seat, the group earned more than 400
million yen, including nearly 300 million yen raised in fund-raising
parties.

11) Political funds in 2005: Total income stands at 132.8 billion
yen, down 3.8%, due to sudden dissolution of Lower House; Donations
by companies and organizations at a low

TOKYO SHIMBUN (Top Play) (Excerpts)
September 8, 2006

The Ministry of Internal Affairs and Communications (MIC) in the
official gazette for Sept. 8 released a political funds income and
expenditure statement (with the central portion of the report
covering 3,887 organizations) and a political party subsidies
expenditure report. The total income of political parties and groups
was 132.85 billion yen, down 3.8% from the previous year. Of that
amount, donations made by companies and organizations stood at 3.42
billion yen, down 7.2% from the preceding year and the lowest level
since 1976, when statistics became available. Total expenditures
stood at 135.85 billion yen, down 2.8% from the year before. Both
income and expenditures stood at an unusually low level for an
election year.

With a set of postal privatization bills voted down in the Diet,
Prime Minister Junichiro Koizumi last year dissolved the Lower
House.

For this reason, political parties and groups were unable to raise
sufficient funds for the election. The size of expenditures was also

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small due to the short-term battle, which allowed little time for
preparation.

12) Abe eyes Japan-China summit at APEC in November

YOMIURI (Top play) (Excerpts)
September 8, 2006

If he becomes prime minister, Chief Cabinet Secretary Shinzo Abe,
51, intends to hold talks with Chinese President Hu Jintao on the
sidelines of the Asia-Pacific Economic Cooperation (APEC) forum to
be held in Hanoi on Nov. 18-19. Abe hopes to resume Japan-China
summit talks with the establishment of the new administration to
improve relations between the two countries. Abe is unlikely to
visit Yasukuni Shrine during the shrine's annual autumn festival in
October or on any other occasions this year.

Summit talks between the two nations have been stalled since April
2005 due to China's opposition to Prime Minister Junichiro Koizumi's
visits to the shrine. The Foreign Ministry has begun setting the
stage with China in line with Abe's wishes, who is likely to replace
Koizumi. Beijing is expected to accept a summit with Abe if he does
not visit the shrine in the fall.

A senior government official said yesterday: "China needs Japan. Our
two countries are beginning to share the view that both sides have
to exercise restraint." Thus, he indicated that the environment has
been improving for the summit talks in November.

13) JCP Chairman Shii: Broad channel has been opened up; Agreement
reached between Shii and ruling ROK party leaders on historical
issue

MAINICHI (Page 5) (Excerpts)
September 8, 2006

Japanese Communist Party (JCP) Chairman Kazuo Shii, now visiting
South Korea -- a first time for a JCP leader, yesterday completed
his schedule of planned meetings with leaders of major South Korean
political parties, including the Uri Party and the Grand National
Party. At a press conference later, Shii stressed, "A major channel
has now been opened between Japan and South Korea." Shii and South
Korean party leaders agreed on the need to resolve the history issue
between the two countries. He played up the differences in his
party's diplomatic stances from those of the Koizumi government,
which has seen relations with South Korea deteriorate due to Prime
Minister Koizumi's repeated visits to Yasukuni Shrine.

Uri Party leader Kim Geun Tae told Shii on Sept. 7: "If I met you
before the 1987 democratic declaration, I would have become the
subject to the National Security Law."

In the past, relations between South Korea, which has taken an
anti-communist stance from the position of facing off against North
Korea, and the JCP, which had criticized South Korea for being
controlled by a government under military dictatorship, were not
good. The JCP, however, opposed in the prewar period Japan's
colonial rule of the Korean Peninsula. Regarding this point, "South
Korea highly values our party," said a JCP International Bureau
official. The JCP aims to expand exchanges with South Korea. The
Korean side wants to play up criticism of the Koizumi government for
its handling of the history issue. The similar aims of the two sides

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seem to have brought Shii to Seoul.

14) Japan proposes to ROK a joint radiation survey around
Takeshima/Dokdo

TOKYO SHIMBUN (Page 3) (Full)
September 8, 2006

Kiyoshi Nakamura, Seoul

Japan and South Korea yesterday wrapped up the two-day strategic
dialogue between Japanese Administrative Vice Foreign Minister
Shotaro Yachi and South Korean Vice Minister for Foreign Affairs and
Trade Yu Myung Hwan. The talks had been held at a hotel in Seoul.

During the meeting, Japan proposed establishing a prior notification
system for scientific surveys in order to prevent unforeseen
situations in waters around Takeshima/Dokdo, where the two
countries' exclusive economic zones overlap. But South Korea
expressed opposition to the proposal. Japan then seemed to offer
another proposal for a joint radiation survey, which is being
planned in Japan, as a breakthrough in the stalemate in the talks.

Japan and South Korea conducted joint radiation surveys in 1994 and
1995 in order to deal with nuclear waste dumped by the former Soviet
Union. Japan wants to use the joint survey as a framework for
cooperation in waters around Takeshima/Dokdo. After the talks, Vice
Minister Yachi mentioned the radiation survey and revealed that
working-level talks on would continue, saying: "Discussions are
moving in a good direction for Japan-South Korea relations."

According to a diplomatic source, if South Korea refuses to accept
Japan's compromise proposal, Japan will conduct the radiation survey
as initially planned.

15) Russian barriers stand in way of natural resource development:
Lawsuit filed for suspension of Sakhalin-2 project, citing
environmental reasons

ASAHI (Page 3) (Excerpts)
September 8, 2006

The planned oil and natural gas production under the Sakhalin-2
project, financed by leading Japanese trading firms, is at a
crossroads. Work to construct pipelines has been halted due to
environmental issues. In addition, the Russian Federal Service for
the Supervision of Natural Resources filed a lawsuit calling for a
suspension of the development. Behind these moves seems to be a
strategy of the Putin administration, which has strengthen its grip
over natural resource development in the nation.

Japan concerned about delay in production

In Japan, concerns are growing about a delay in production in the
project. Exports of liquefied natural gas to Japan and other
countries are scheduled to begin in the summer of 2008. This is
already more than one year behind schedule.

The project aims to produce 9.6 million tons of natural gas, of
which Japanese electric and gas companies expect to purchase more
than 4 million tons. An employee of Tokyo Gas Co., which plans to
buy 1.1 million tons, said: "Since there is no official explanation,

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we cannot figure out how much effect this will have." The company,
which imports about 9 million tons of natural gas from Southeast
Asia and elsewhere annually, has placed high expectations on the
Sakhalin-2 project as part of its strategy to diversify suppliers.
Focusing on its short transport distance, Tokyo Electric Power Co.,
Toho Gas Co., and Kyushu Electric Power Co. also intend to procure
gas produced under the project.

Few companies believe that the project itself will be suspended.
Although Russia has certainly attained remarkable economic growth
recently, the nation is still dependent on foreign investment
because its technologies to liquefy natural gas and drilling in
frozen land lag far behind developed countries.

Petroleum and Mining Association of Japan's Planning and Research
Department Head Taro Shoji commented:

"The aim of Gazprom's participation in the project is to acquire
technology to liquefy natural gas. Russia does not want the project
suspended. Its recent moves reflect a national strategy of gathering
information and authority for the Sakhalin-2 project."

16) Energy security: Japan, China, US, South Korea and India to
create framework

NIHON KEIZAI (Page 5) (Full)
September 8, 2006

The Ministry of Economy, Trade and Industry (METI) yesterday
revealed a plan for energy ministers of Japan, China, the US, South
Korea and India to meet in Beijing in late October with the aim of
creating an energy security framework. The participants will discuss
emergency measures, including energy conservation and oil reserves,
and the diversification of energy sources.

It is said that these five countries account for approximately 50%
of the world's energy consumption. This is the first time for
concerned ministers to meet to discuss the energy issue.

China, whose energy demand is pronouncedly growing, has proposed
holding such a meeting. Based on its experience with past two oil
crises, Japan will introduce its efforts to reserve oil and conserve
energy. Japan and China held a bilateral energy dialogue at METI.
During this meeting, too, the two countries reassured technical
cooperation between the two countries.

17) Commander of US Naval Forces Japan says to deepen debate on
exercise of right to collective self-defense to deal with North
Korean missiles

TOKYO SHIMBUN (Page 3) (Full)
September 8, 2006

Rear Admiral James Kelly, commander of US Naval Forces Japan,
yesterday met the press at the US Fleet Activities Yokosuka at
Yokosuka City, Kanagawa Prefecture, and said that in order for Japan
and the United States to work together to deal with North Korean
ballistic missiles under the missile defense (MD) system, "I hope to
see debate on constitutional revision deepen here so that (Japan)
can exercise its right to collective self-defense."

When North Korea test-fired ballistic missiles on July 5, the US

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Navy and the Japanese Maritime Self-Defense Force's (MSDF) Aegis
ships moved jointly to detect and track the missiles.

Kelly stated, "If MSDF ships come under attack while on duty of this
kind, the US Navy will defend them, but the MSDF can't do so in the
opposite case." He thus implied that it is unavoidable to debate the
question of the right to collective self-defense in order for Japan
and the US to join hands under the MD system.

Kelly also explained that a North Korean Rodong missile, if it were
fired toward Japan, could land in the country in less than 10
minutes, and that it must be intercepted within two minutes and 30
seconds. Speaking of who will make a final decision to fire Standard
Missile 3 (SM3) missiles to intercept it during that short period of
time, he stated, "Who will decide to do so has yet to be decided."

Referring to the right of collective self-defense and the question
of command and control that are both related to the MD system, Kelly
told the press that discussions had been launched between Japanese
and US foreign affairs and defense officials, including uniformed
officers. And he expressed his hope that Japan and the US would
build a mechanism for both sides' ships to defend each other during
the one year of discussions.

18) September economic report will not declare end of deflation due
to concern over slowdown of US economy

TOKYO SHIMBUN (Page 1) (Excerpts)
September 8, 2006

The Cabinet Office yesterday decided not to declare the end of
deflation in the monthly economic report for September to be
released on Sept. 15. With price-related indexes taking an upward
turn, calls have been growing for the government to declare the end
of deflation as an achievement of the Koizumi administration's
management of the economy. However, the Cabinet Office has judged
that it is premature to issue such a declaration because of various
risk factors, including crude oil prices still at a high level and
concern over the slowdown of the US economy.

The Cabinet Office has judged, based on the July economic report
that the situation is not such in which prices are falling
continuously. However, declaring the end of deflation is attached
with a severe condition that there is no prospect for the return of
deflation. The Cabinet Office has, therefore, carefully looked into
whether it is appropriate to issue such a declaration under the
present economic climate.

SCHIEFFER

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